Are they as good as they look?
Are they as good as they look?
Find out whether the new features actually improve your cover or perhaps limit it
By Lorna Tan, Finance Correspondent
GRAPICS: LIM YONG, PHOTO ILLUSTRATION: MIKE M DIZON and ISTOCKPHOTO
COMPETITION between insurers in the Shield medical market has been fierce over the past 12 months and consumers have reaped the benefits.
Not only were most of the enhancements a boost for policyholders - for instance, the removal of medical benefit sub-limits - but some were also introduced without the need to raise premiums.
Shield plans are hospitalisation schemes whose premiums can be paid with Central Provident Fund (CPF) savings. Five insurers provide such plans.
The most innovative enhancement was the removal of benefit sub-limits. This means that medical expenses such as daily room and board and surgical procedures are claimable and not subject to specified limits.
The feature was first introduced by British insurer Aviva and eventually made available by the rest.
Other enhancements have included riders for the deductible and co-insurance portions of Shield plans, as well as the removal of lifetime limits and the raising of caps on annual limits.
RELATED LINKS
Salient features
To differentiate themselves from the competition, insurers are now offering unique features intended to attract more customers.
For instance, Great Eastern is the only insurer to cover treatments relating to birth defects, including hereditary conditions, and congenital sicknesses or abnormalities, subject to certain conditions.
Aviva recently introduced several enhancements to its MyShield plan without raising its premiums.
Two of the features added are the first of their kind in Singapore. The features seem attractive, but now, industry experts are debating their pros and cons.
Doing away with medical declarations
Applicants for Aviva's MyShield plans will no longer need to declare their medical history when they sign up. This is on the condition that they are not employed in certain occupations and have not been rejected for health or life insurance previously.
The advantage is faster processing and approval of applications. Another plus is that customers will not be penalised for non-disclosure if they forget to declare some minor health condition experienced years ago, said Mr Stanley Sim of financial advisory firm New Independent.
Five-year waiting period for pre-existing illnesses
The other unique feature, which comes together with the omission of a health declaration, is the extension of cover to certain pre-existing illnesses after a five-year waiting period or 'moratorium'.
Under the change, a MyShield customer will be covered for certain pre-existing illnesses, provided they show no symptoms for five years after signing up.
The terms include not experiencing symptoms, and not seeking advice, tests or treatment from doctors or specialists.
Take a person who develops a hernia in the first five years of taking up the plan. He will be covered under MyShield unless it is proven that the condition existed before he signed up.
If he develops a hernia in the sixth year, he will be automatically covered if he did not experience symptoms and did not seek medical advice or treatment during the five-year waiting period, even if he had a hernia before signing up.
The associate director of financial advisory firm PromiseLand Independent, Mr Patrick Lim, said that this waiting period is beneficial to customers.
He noted that the five-year moratorium means customers get coverage that they would not get from insurers that exclude pre-existing conditions.
However, some medical conditions - such as Aids or HIV infections, strokes and heart attacks - are permanently excluded if the customer had these illnesses before purchasing MyShield.
For new customers who opt to make a health declaration, Aviva says they will be subject to underwriting and the five-year moratorium will not apply. For existing MyShield customers, the moratorium period will apply from the policy's inception.
To declare or not to declare?
SOME industry experts such as Mr Leong Sze Hian, the president of the Society of Financial Service Professionals, believe people are better off declaring their medical history at the onset of cover. Doing so brings greater certainty as to what is covered and excluded, right from the start.
'Under the current system, under which there is a health declaration, when the insurer accepts you, you are covered subject to the policy terms and conditions as long as there was no non-disclosure of a condition you were aware of,' said Mr Leong.
'With a health declaration, if you are accepted, even with an exclusion, other related or unrelated illnesses are covered.'
Mr Stanley Jeremiah, the vice-president of business services, global benefits at employee benefits group Convergys, does not consider the five-year moratorium as an enhancement to the cover.
'The five-year moratorium only means that the policyholder has bought a policy and is paying for insurance but he does not have full cover,' he said.
'It is much better for an insured to have his cover properly underwritten and know exactly where he stands with respect to the cover he has.
'If he has a medical condition, it might not be excluded at all or the insurer might be prepared to cover him for an extra premium, in which case my advice would be pay the extra premium and get full cover.'
Mr Jeremiah emphasised that there is nothing worse than thinking you are covered when you are not. After all, the purpose of insurance is to take the risk away from the individual and pass it on to the insurer.
Both Mr Jeremiah and Mr Eddy Cheong, a financial planner at independent investment management firm Providend, said it is better to ensure that you are properly covered from the day your policy is issued.
While Mr Cheong likes the simplicity and ease of not being required to make a health declaration, he suggests a different approach.
First, make a health declaration when you apply for the policy. Let any pre-existing conditions that are excluded at inception be subject to a specified waiting period (during which you must not show any symptoms, or seek medical advice or treatment). After that period, the conditions will be automatically covered.
For those who are trying to decide if Aviva's enhanced MyShield is a better plan than others, here are some points to consider with regard to pre-existing conditions.
Scenario 1: You have a pre-existing condition
If you have a pre-existing condition, check if it is on Aviva's list of permanently excluded medical conditions. These include stroke, multiple sclerosis, dementia, Aids, autism and any form of cancer, except skin cancer.
If your condition is on the list, Aviva will permanently exclude it if you had it before signing up for MyShield, even if it did not surface during the five-year moratorium period.
It is worth your while to shop around and check if other insurers will cover the illness, or do so for a higher premium or with other terms.
If your pre-existing illness is not on Aviva's list of permanently excluded conditions, hope that it does not surface during the five-year moratorium period. If you did not experience symptoms and did not seek medical advice or treatment during the five years, the illness will be covered under MyShield after that.
Scenario 2: You do not have a pre-existing condition
You might be certain at the point of signing up for MyShield that you do not have any pre-existing condition. But are we always so sure of our health?
Take note of the clause in Aviva's policies on pre-existing conditions. This states it will exclude such conditions whether or not you are aware of them.
This means you could find yourself without cover for a permanently excluded medical condition that surfaces during the tenure of the policy if it can be proven that you actually had the illness, even though you might be ignorant of this.
However, with other insurers, there is a chance that the condition will be covered if you were genuinely unaware of it and it is diagnosed only after the policy's inception.
Find out whether the new features actually improve your cover or perhaps limit it
By Lorna Tan, Finance Correspondent
GRAPICS: LIM YONG, PHOTO ILLUSTRATION: MIKE M DIZON and ISTOCKPHOTO
COMPETITION between insurers in the Shield medical market has been fierce over the past 12 months and consumers have reaped the benefits.
Not only were most of the enhancements a boost for policyholders - for instance, the removal of medical benefit sub-limits - but some were also introduced without the need to raise premiums.
Shield plans are hospitalisation schemes whose premiums can be paid with Central Provident Fund (CPF) savings. Five insurers provide such plans.
The most innovative enhancement was the removal of benefit sub-limits. This means that medical expenses such as daily room and board and surgical procedures are claimable and not subject to specified limits.
The feature was first introduced by British insurer Aviva and eventually made available by the rest.
Other enhancements have included riders for the deductible and co-insurance portions of Shield plans, as well as the removal of lifetime limits and the raising of caps on annual limits.
RELATED LINKS
Salient features
To differentiate themselves from the competition, insurers are now offering unique features intended to attract more customers.
For instance, Great Eastern is the only insurer to cover treatments relating to birth defects, including hereditary conditions, and congenital sicknesses or abnormalities, subject to certain conditions.
Aviva recently introduced several enhancements to its MyShield plan without raising its premiums.
Two of the features added are the first of their kind in Singapore. The features seem attractive, but now, industry experts are debating their pros and cons.
Doing away with medical declarations
Applicants for Aviva's MyShield plans will no longer need to declare their medical history when they sign up. This is on the condition that they are not employed in certain occupations and have not been rejected for health or life insurance previously.
The advantage is faster processing and approval of applications. Another plus is that customers will not be penalised for non-disclosure if they forget to declare some minor health condition experienced years ago, said Mr Stanley Sim of financial advisory firm New Independent.
Five-year waiting period for pre-existing illnesses
The other unique feature, which comes together with the omission of a health declaration, is the extension of cover to certain pre-existing illnesses after a five-year waiting period or 'moratorium'.
Under the change, a MyShield customer will be covered for certain pre-existing illnesses, provided they show no symptoms for five years after signing up.
The terms include not experiencing symptoms, and not seeking advice, tests or treatment from doctors or specialists.
Take a person who develops a hernia in the first five years of taking up the plan. He will be covered under MyShield unless it is proven that the condition existed before he signed up.
If he develops a hernia in the sixth year, he will be automatically covered if he did not experience symptoms and did not seek medical advice or treatment during the five-year waiting period, even if he had a hernia before signing up.
The associate director of financial advisory firm PromiseLand Independent, Mr Patrick Lim, said that this waiting period is beneficial to customers.
He noted that the five-year moratorium means customers get coverage that they would not get from insurers that exclude pre-existing conditions.
However, some medical conditions - such as Aids or HIV infections, strokes and heart attacks - are permanently excluded if the customer had these illnesses before purchasing MyShield.
For new customers who opt to make a health declaration, Aviva says they will be subject to underwriting and the five-year moratorium will not apply. For existing MyShield customers, the moratorium period will apply from the policy's inception.
To declare or not to declare?
SOME industry experts such as Mr Leong Sze Hian, the president of the Society of Financial Service Professionals, believe people are better off declaring their medical history at the onset of cover. Doing so brings greater certainty as to what is covered and excluded, right from the start.
'Under the current system, under which there is a health declaration, when the insurer accepts you, you are covered subject to the policy terms and conditions as long as there was no non-disclosure of a condition you were aware of,' said Mr Leong.
'With a health declaration, if you are accepted, even with an exclusion, other related or unrelated illnesses are covered.'
Mr Stanley Jeremiah, the vice-president of business services, global benefits at employee benefits group Convergys, does not consider the five-year moratorium as an enhancement to the cover.
'The five-year moratorium only means that the policyholder has bought a policy and is paying for insurance but he does not have full cover,' he said.
'It is much better for an insured to have his cover properly underwritten and know exactly where he stands with respect to the cover he has.
'If he has a medical condition, it might not be excluded at all or the insurer might be prepared to cover him for an extra premium, in which case my advice would be pay the extra premium and get full cover.'
Mr Jeremiah emphasised that there is nothing worse than thinking you are covered when you are not. After all, the purpose of insurance is to take the risk away from the individual and pass it on to the insurer.
Both Mr Jeremiah and Mr Eddy Cheong, a financial planner at independent investment management firm Providend, said it is better to ensure that you are properly covered from the day your policy is issued.
While Mr Cheong likes the simplicity and ease of not being required to make a health declaration, he suggests a different approach.
First, make a health declaration when you apply for the policy. Let any pre-existing conditions that are excluded at inception be subject to a specified waiting period (during which you must not show any symptoms, or seek medical advice or treatment). After that period, the conditions will be automatically covered.
For those who are trying to decide if Aviva's enhanced MyShield is a better plan than others, here are some points to consider with regard to pre-existing conditions.
Scenario 1: You have a pre-existing condition
If you have a pre-existing condition, check if it is on Aviva's list of permanently excluded medical conditions. These include stroke, multiple sclerosis, dementia, Aids, autism and any form of cancer, except skin cancer.
If your condition is on the list, Aviva will permanently exclude it if you had it before signing up for MyShield, even if it did not surface during the five-year moratorium period.
It is worth your while to shop around and check if other insurers will cover the illness, or do so for a higher premium or with other terms.
If your pre-existing illness is not on Aviva's list of permanently excluded conditions, hope that it does not surface during the five-year moratorium period. If you did not experience symptoms and did not seek medical advice or treatment during the five years, the illness will be covered under MyShield after that.
Scenario 2: You do not have a pre-existing condition
You might be certain at the point of signing up for MyShield that you do not have any pre-existing condition. But are we always so sure of our health?
Take note of the clause in Aviva's policies on pre-existing conditions. This states it will exclude such conditions whether or not you are aware of them.
This means you could find yourself without cover for a permanently excluded medical condition that surfaces during the tenure of the policy if it can be proven that you actually had the illness, even though you might be ignorant of this.
However, with other insurers, there is a chance that the condition will be covered if you were genuinely unaware of it and it is diagnosed only after the policy's inception.
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